The Yen Money Flow is Important to your Trading

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The Yen Money Flow is Important to your Trading
The Yen Money Flow is Important to your Trading

Everyone who has been blessed with common sense is waiting for the big market reversal to occur, but is always one day away as Annie once sung.

What is important now to realize is that the Yen’s weakness created additional money flow into other asset classes like Global Markets and the US Dollar as Mrs. Watanabe had to make some portfolio changes in her staid Japanese Government Bond portfolio.

To find hints and clues that the market has the potential to reverse, we must look at longer time frames to capture key price points that would indicate a top is in.

One, on Friday, was 101.26 in the USD/JPY which would have indicated a Bearish Engulfing, or Outside Reversal day on the weekly chart and signaled to technicians that there are sellers in the market.  But we were saved from a very negative chart pattern by the end of US trading and the beginning of Memorial Day holiday in the States.

usdjpy-weekly-noorl

If you have any questions, please contact eric (at) caesartrade.com

Happy Trading

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.